Cable companies sell the most movies on demand, but other pay TV competitor are increasing their share of the market. / The NPD Group

by Mike Snider, USA TODAY

by Mike Snider, USA TODAY

Cable companies continue to dominate the home video-on-demand market, but telecom TV operators are increasing their share.

Consumers spent $1.3 billion ordering movies and other video-on-demand from their pay TV service in 2012, according to The NPD Group's 2012 VideoWatch VOD Report.

Cable TV companies such as Comcast and Time Warner controlled more than half (56%) of the VOD movie market, but that is down from 60% in 2011, the report says. Telecom TV operators such as Verizon FiOS and AT&T U-Verse increased their share by 4 percentage points up to 18% in 2012 from 14% in 2011. Satellite TV operators DIRECTV and Dish Network increased their share of the VOD movie market slightly, earning 27%, up from 26%.

Verizon and AT&T also generated more revenue per subscriber on average, too. The average telecom pay TV subscriber spent $25.29, compared to $13.83 for cable TV operators. Satellite companies got about $10.33 per subscriber.

"Verizon FIOS and AT&T U-verse still considerably lag cable operators in the number of service subscribers; however they are actually growing their share of the MPVD VOD-movie-rental market," said Russ Crupnick, NPD's senior vice president of industry analysis, in a statement accompanying the report's release. "Telecom operators are leading their competitors when it comes to earning additional revenue from VOD movie rentals."

The report covered only revenue generated by separate per-movie rental fees, not pay TV subscriptions or Internet services such as Netflix. The total electronic home video market was estimated at about $6.4 billion in 2012, according to PricewaterhouseCoopers.